Timing is everything when it comes to video games -- something Microsoft (NASDAQ:MSFT) will learn as it ends a 32-month streak as the country's top-selling console.
Industry tracker NPD Group reported on Thursday that Microsoft's Xbox 360 was unseated as the country's hottest-selling console in September, while Sony's (NYSE:SNE) PS3 took the top honors. Microsoft had ruled over Sony's PS3 as well as Nintendo's (NASDAQOTH:NTDOY) Wii and eventually Wii U in the monthly retail market readings since January. NPD is often taken to task for relying on physical retail -- sidestepping the booming e-tail and digital downloading markets in its base metric -- but that doesn't play much of a factor on the hardware end. If NPD says Sony outsold Microsoft for the first time since 2010, it probably happened.
Now we get to the timing issue. Sony is introducing the PS4 in less than a month, and Microsoft will follow with the Xbox One a week later. Gamers have probably assumed that Microsoft would own the new round of console wars, at least domestically. It's the hometown hero. It's the one with tens of millions of diehard gamers willing to pay Xbox Live for gold memberships to provide enhanced connectivity features. However, Microsoft upset some players earlier this year, when it announced restrictive measures for its console. It backtracked on some of the unpopular connectivity restrictions, but then it priced its console at $100 more than Sony's PS4.
There's more to a console war than price, of course. We've seen Nintendo's Wii U fall flat on its face since hitting the market 11 months ago at a far lower price point than either the PS4 or Xbox One. However, if Microsoft was banking on having its momentum make it a no-brainer winner this holiday shopping season and beyond, it may want to fold back up that acceptance speech and work on a concession.
Then again, maybe it's too soon to crown Sony the winner. NPD reports that hardware sales fell 13%, but Wii U unit sales tripled sequentially in September relative to August after its drastic $50 price cut. The Wii U is unlikely to be much of a threat to those eyeing a PS4 or Xbox One this holiday shopping season, but let's not underestimate parents of younger gamers who are hungry for a bargain in this still uncertain economy.
The industry itself had a strong September on the software front. That's definitely encouraging, but it probably wouldn't have happened if not for Take-Two Interactive's (NASDAQ:TTWO) Grand Theft Auto V. NPD reports that Take-Two's marquee release accounted for roughly half of the dollar sales volume of physical software retail sales last month. Take-Two Interactive's game is available for both the Xbox 360 and PS3, so the game's success probably didn't play a part in the PS3's September victory over the Xbox 360.
Both console giants should fare well with next month's debuts, but the picture of the ultimate winner has never been fuzzier. Microsoft has the audience, but now Sony has the momentum.
Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Take-Two Interactive and owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.